8/1/14

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 1, 2014) - Mercator Minerals Ltd. (TSX:ML) ("Mercator" or the "Company") announces, further to the Company's July 15, 2014 press release, that given that the Company and Intergeo MMC Ltd. ("Intergeo") have not agreed to extend the completion deadline in connection with the proposed business combination between Mercator and Intergeo announced on December 12, 2013 (the "Arrangement") beyond August 1, 2014, the arrangement agreement has been terminated in accordance with its terms. As such, the proposed business combination will no longer proceed.

As a result of the termination of the Arrangement, certain events of default have occurred and are continuing under the credit agreement entered into between the Company's indirect wholly owned subsidiary, Mineral Park Inc. ("MPI" or "Mineral Park") and its senior lenders (the "MPI Lenders"), and under the bridge loan agreement entered into between Mineral Park and Intergeo's controlling shareholder, Daselina Investments Ltd. The MPI Lenders have agreed to forebear from exercising their various rights and remedies under the credit agreement, until up to August 15, 2014.

To be accurate, it's his Symphony Number Six, opus 68, but the world better knows this music magic by its one word title. This version comes from the Boston Symphony Orchestra, conducted by Leonard Bernstein.

Because I have it and its true importance now summed up in a short message:

The default matters more to a) politicians of all flavours and b) analysts and journalists opposed to the Argentina government from both inside and outside the country, than it does to the financial markets.

That's it, the whole thing. Which in the end is just a specialized version of 'money talks bullshit walks'.

If you don't understand that this isn't like 2001, if you don't get how Argentina won't be particularly affected (esp not in the short term), if you have not yet caught on that there's no governments about to fall or even any policy changes in the pipeline, well that's fine. I'm now officially bored with this story because for one thing I've called it reasonably well and it's panned out as expected (i.e. no surprises = no fun) it's around now the issues begin to go around in circles and the baseline capitalist in me sees little advantage in immersing into the minutae. And I'm not Argentine.

7/31/14

...as it insists until blue in the proverbial face that the whole shebang is being mightily overplayed by people with more agenda than smarts, read this analysis. Here's a chunk:

The exchange bondholders are not suffering grievous harm: nearly all of them are quite happy right now, having bought their bonds well below the levels at which they’re currently trading. The holdouts are not suffering grievous harm: they bought non-performing debt, they still own non-performing debt, and the value of that debt is much higher than what they paid for it. And as for the ordinary Argentine citizen, well, there’s a lot of inflation and unemployment and black-market foreign-exchange trading going on, but that’s been true for years, and it’s far from clear how much — or even whether — the default is going to exacerbate such things.

Indeed, Argentina is in pretty good financial shape right now. Both the country and its corporations have relatively little debt, which means relatively little problem rolling it over. Bank deposits are stable. The exchange rate doesn’t seem any more fragile than it has been for months. Foreign reserves have actually been going up in recent weeks. In terms of day-to-day financial life in Argentina, today looks almost identical to yesterday. Nothing much has really changed.

Or, just look at the Argentine stock market — the chart at the top of this article. You’ll see that it’s on a veritable tear right now. As in, going up, not down. Part of that is just inflation — but part of it is the market showing that it doesn’t particularly mind the fact that the sovereign is back in default.

From about the only person writing op-eds in English that understands what's going on. Yup, it's that Felix Salmon guy again. Read the whole thing here, he nails it.

Coeur Mining, Inc. ("Coeur" or the "Company") (CDE) announced results from a feasibility study on the La Preciosa silver-gold project located in Durango state, Mexico and announced the Company's decision to defer construction activities at this time.

...and then this line:

We consider La Preciosa to be one of the best silver projects in North America

So c'mon world, 'splain me how those can live next to each other without resorting to doublethink or calling its officers total fuckwits.

If they're deferring construction, it's not economic.
If it's not economic, why is it one of the best silver projects?
If it's one of the best silver projects, build it already!
If they're not building it, it can't be economic
(I could continue)

...has just been sent to subscribers, pre-opening bell Thursday morning. Keeping abreast of a small sliver of the news coming through the sector.

UPDATE: A second Flash update also sent, half an hour after the opening bell. I was asleep at the switch for the open, but there's value to be had in at least one small and speculative position. Trying to add.

7/30/14

Both those posts are standing up to the newsflow very well, nothing else to add.

UPDATE: An interesting development. Argentina bizmediaAmbito Financiero is claiming an exclusive on news that the vulture funds and a group of Argentine banks have come to an agreement on the holdout bonds, with the basic story (and you're bound to get the details from a thousand sources if this proves to be true) being Argentine bankers will buying the debt from the vultures.

This would mean the default would almost certainly disappear into a puff of thin air, as the new holders of the bonds (the consortium of Argentine banks) would be happy to deal with the government.

Dr. Jimenez was formerly the Executive Director of the Association for the Large-Scale Mining Sector - SMGE (now the Mining Colombian Association), an organization created in 2011 which, under Dr. Jimenez's leadership, helped facilitate the rapid growth that the Colombian mining sector has experienced in recent years to become an important economic and social industry in Colombia.

James Elbert comments, "By selling the Rushan/Daye property in China earlier this year, the Company extinguished approximately four million dollars of debt. This allows Goldrea to focus on mineral projects in North America and places the company in a positive cash position. Along with developing our core holdings, we plan to explore the current ripe environment for deeply discounted quality properties. Our move to the CSE is a positive step in the Company's administration, and we look forward to robust growth in the coming years."

Translation:

James Elbert comments, "My company had nothing but a pile of debt and some moosepasture, now we have no debt and no prospects. It felt pointless for us to continue trading on the Venture, especially now that it's become impossible to raise money even from family and Canadian singer-songwriters. Besides, retail can trade on the X just as easily now, and they don't read audited financials anyway."

A good start!

IKN says that this kind of translation thing needs to be done more often.

Last few days of production numbers from juniors have come with these messages, either from the company itself or from the analysts that cover them:

McEwen Mining (MUX) (MUX.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

Aurico Gold (AUQ) (AUQ.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

Silvercrest Mines (SVLC) (SVL.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

B2Gold (BTO.to) (BTG): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

Argonaut Gold (AR.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

Luna Gold (LGC.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.

We therefore suggest to readers as a logical follow-on that they read both the 2q14 results NR from Detour Gold(DGC.to) last night, as well as 100% of the comments and analyses of this company by the sycophantic, numbers-to-order Canadian brokerage anal ysts.

Either that or read "The Emperor's New Clothes", by Hans Christian Andersen. A cracking read.

It's a Q&A with the Peru State TV channel, which is permanently officialist in its stance so all questions are softball.

Even so and despite the glossing over of its errors and miscalculations that got us to today, it's a very good overview of the measures the Peru government has brought in to tackle the country's economic slowdown.

In a nutshell, the thrust and keyword from Castilla is now "countercyclical" which means he's been listening to critics. Definitely late in arrival, but better late than never I suppose.

My stars, Castilla has put on weight recently. That dude needs to care more about his waistline.

Overall and with exceptions, Krugman would approve of these moves.

Not so very much for mining companies that hasn't already been announced (the big guys get the tax breaks and stability clause renewal heralded earlier this month, the little fish get easier permitting which is now done online).

If you have the lingo down and are interested in the subject of Peru macro, the above link is highly recommended. Strip out the love-in language and there's a lot of substance.

7/29/14

Oh, stock market up 6.5% today, is it? Probably coincidence or something. And while we're at it...

...oh look, stock market up from 2,500 to 8,300 in the two years that Griesa and the vultures have been telling it about its "obligations".

If you're wondering why the English language press covering this stupidity haven't mentioned the way finances have been rocking in Argentina, that'd probably be something to do with agendas and narratives and how facts don't tend to fit into the things they want you to believe

Totally in line. FWIW* I had them doing $7.9m in op earnings from $41.6m in revenues. Reality has themat $7.2m op earnings from $42.4m revenues. The difference won't break the bank, a decent quarter and gold's moves will affect its share price this week more than this set of numbers. End.

Full disclosure: I own this one because Argonaut (AR.to) is going to buy it out.

This is a good interview with Frank Bajak of AP, in which he informs on what's happening between Peru's government, its environmental protection laws and mining companies. Here's the header blurb from the click, click through and listen to the whole thing, you'll know more than most about the issue afterwards.

In December, the government of Peru will host the United Nations Climate Change Conference, but the country has a spotty record when it comes to environmental protection. Last month Peru passed a law that many critics say greatly weakens the power of the country's Ministry of Environment. The law takes away the Ministry’s ability to regulate air, soil and water quality standards and its ability to regulate harmful substances. The law also limits the Ministry’s ability to establish nature reserves and fine mining companies for accidents or spills. All of this is set against the backdrop of a long history of environmental problems in the country. In the past five years there have been oil spills in the jungle region, pipeline bursts that have made hundreds of people sick, and violent protests against mining companies that resulted in eight deaths in 2012.

Frank Bajak, chief of Andean News for the Associated Press, has been reporting from Lima on environmental issues in Peru for the last three years. He joins us to explain how the new legislation has weakened the position of the Ministry of Environment, even as Peru gets ready to host the United Nations Climate Change Conference.

Right here. Good note. Here's an extract that shows how Salmon gets it right when many get it wrong:

Like a drowning man grasping at a twig, the market reporter will reach for anything whatsoever, if it could help explain a change in bond prices.

Which in turn explains the single biggest howler, repeated ad nauseam in the coverage of this story — the patient and ubiquitous explanation that Argentina has every reason to avoid a default, because if it defaults, then it will lose access to international capital markets.

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